The Court of Appeal decision in the case of Lankester & Son Ltd v Robert David Rennie and Anne Rennie reaffirms that tenants must ensure they follow all the appropriate legal formalities when assigning a lease, to ensure effective assignment of the lease and to release the outgoing tenant from its obligations under the lease.
In this particular case, the signed but undated transfer in respect of the assignment of the lease was not delivered in the legal sense and on the particular facts there was no estoppel or implied surrender of the lease. Therefore, the lease remained vested in the tenant who remained liable under the lease covenants. The original tenant in this case vacated the premises and allowed the new tenant into occupation without a formal assignment. The new tenant paid rent to the landlord for some time and then sought to vacate. The landlord asserted on the one hand that the new tenant was liable for the rent but on the other hand arguedthat the lease had not been properly assigned and the original tenant was liable for the rent.
The Court of Appeal held that there had been no transfer of legal title, as registration had not been effected and that the original tenant remained the tenant under the lease.
This case affirms the warning to outgoing tenants to ensure the completion of all legal formalities before allowing the assignee into occupation, helping to avoid nasty shocksin the future. Landlords also need to be careful, not to inadvertently find themselves estopped from denying an assignment has occurred.
